Interest free loan is subject to arm’s length test irrespective of commercial expediency

The assessee is a company. It is engaged in the business of manufacture of indoor plastic, rendering engineering services, supply chain management services and administrative support for joint venture companies. The assessee entered into international transactions with its AE and in terms of section 92 of the Act supported the price paid in respect of  the international transaction by filing the necessary Form 3CEB. There is no dispute regarding the price charged by the assessee in respect of international transactions set out in form 3CEB filed by the assessee. The TPO noticed that the Asses...